Hard Money Lender terms and Cash out Refinance question

2 Replies

My husband and I are completely new to real estate investing, but I am already hooked and ready to jump in. The BRRR method is what we'd be going after for a while. Potentially a handful of flips in the future as well since I love the project management and design aspect. (We did a 100% gut and rehab job for our restaurant a few years ago- it happened to be residential turned commercial.)

We have cash to play with, but would prefer to use someone else's money. ;) 

I have a couple of questions....

1- What kind of terms should we pitch to a lender? What rates do hard money lenders prefer? Does anyone have a great setup with an investor and can give us some insight? Do we set up a Promissory Note borrowing $XX amount with interest for XX time and that's that? 

2- This is going to sound a bit hilarious, but hear me out... we are currently unemployed for a couple more months (just sold our restaurant in Dec 2020 and are in the process of purchasing another). Is it going to be impossible to do a cash out refinance? I would assume so... But I was wondering if since we have cash, maybe the bank would just require us to keep some set aside for repairs, etc? Since it will be rented out, so the mortgage will get paid that way? I know there's always a potential for vacancies as well. We have someone who would partner with us as a co-signer, and we'd just co-own the properties under an LLC- of which we'd probably own majority, since he would be 100% passive. This is a long-time friend who is an attorney. Recommendations for or against this type of setup?

I think that's all for now. Any insight would be fabulous!


For fix and flip hard money loans, you look at loan amount up to 90% of the purchase price plus up to 100% of rehab cost, depending on your credit and experience. The rates/points is around 8-10%, 2-3 points also depending on your credit and experience. First time flipper also can find a lender, although not easy.

Unemployment does not affect this. As long as you have the cash reserve for down payment and to start the project, it is fine. 

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